Wall Street eases the pain of ailing FTSE

Swine flu and banking worries dominated the market again yesterday, but leading shares recovered from their worst levels after a better than expected opening on Wall Street.

The FTSE 100 ended down 70.61 points at 4096.40, having fallen as low as 4058.73. By the time London closed, the Dow Jones industrial average stood almost unchanged, confounding expectations of a 100-point fall after reports that Bank of America and Citigroup would need billions of dollars of new capital. The US market was helped by better than forecast consumer confidence figures and news that IT services group IBM planned to raise its dividend by 10%.

In Britain, miners were among the main losers as concerns grew about the effect of the flu outbreak on an already battered global economy. With copper and other metals on the slide, as well as the oil price, Rio Tinto fell 168p to £25.18, Xstrata 36.5p to 563.5p and Anglo American 79p to £13.42.

Banks fell back after Bank of America and Citigroup reports, but the damage to Barclays was limited by a buy note from Nomura, which raised its price target on the bank from 111p to 320p. Barclays closed down 2p at 232.25p, LloydsBanking Group was 4.9p lower at 95.6p and Royal Bank of Scotland fell 1.6p to 32.7p.

On the flu front, GlaxoSmithKline slipped 15p to £10.48 as profit takers moved in following its recent rise because of its production of the Relenza treatment. The prospect of the outbreak causing travel disruption sent cruise operator Carnival another 45p lower to £17.62 and British Airways down 8.1p to 143.1p.Property group Liberty International lost 7.75p to 425.5p as it confirmed a placing and open offer at 310p a share to raise £620m. But defence companies were in demand, with BAE Systems climbing 5.25p to 360.5p. QinetiQ, the former ministry of defence research department, rose 6.75p to 133.75p after analysts at Investec began coverage of the company with a buy recommendation.

Mears, the social housing and care homes group, added 9.75p to 239.5p after an upbeat trading statement. Troubled retailer JJB Sports slipped 1.25p to 23.75p despite news that activist investor Crystal Amber had taken a 13% stake. Miner Beowulf jumped 90% to 2.375p with 7.7m shares traded, after tests proved it was possible to extract iron from its Ruoutevare deposit in Sweden.